Erosion of Trust

August 4, 1981

In a healthy economy, there is a balance between the desire of men for money now (currency) and promises of future money (credit). This requires a confidence in the currency and a faith in the promises of people.

When a financial crisis approaches, people may lose faith in the promises and demand the currency. This results in a deflationary crash. People may lose faith in the currency and demand other forms of wealth. This results in accelerating inflation, even hyperinflation. Loss of faith in both the currency and the promises to pay would bring a complete economic collapse. It is this possibility which our economic "planners" are playing with. The betrayal of a people's trust inevitably leads to disillusionment and the deterioration of confidence and trust. Without trust, commerce and the division of labor disappear, and civilization disappears. As men sow, so do they reap.